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Billion-dollar snack giants like Hershey and PepsiCo jacked up prices for years during inflation, only now preaching affordability after their profits cratered from consumer revolt.
Story Snapshot
- Major snack companies raised prices aggressively from 2021-2023, with Hershey up 20 points and Mondelez 30 points, fueling record profits amid Biden-era inflation.
- Consumer backlash hit hard in 2024-2025: 43% of shoppers cut back on snacks due to sticker shock, boosting private-label alternatives.
- Early 2025 earnings forecasts reveal plunges—Hershey EPS down 36-38%, Mondelez 10%—prompting sudden halts on hikes and affordability pledges.
- Trump’s MAHA push aligns with industry shifts: 35% of food makers, including Hershey, commit to ditching artificial dyes, echoing demands for cleaner, affordable options.
Price Hikes Fueled Profits Amid Fiscal Mismanagement
Snack industry revenue reached $51.63 billion in 2024, driven by indulgence despite soaring costs from 2021 inflation. Hershey’s cost of goods sold jumped from $4.45 billion in 2020 to a projected $7.3 billion in 2025. Cocoa prices spiked 250% in three years, leading companies to pass costs directly to consumers. PepsiCo ran multiple price increase rounds through 2023. Mondelez lifted prices 30 points over three years while costs rose from $16 billion to over $25 billion. These moves preserved margins during Biden’s overspending era that ignited inflation, hitting working families hardest.
Consumer Revolt and Demand Collapse Force Reckoning
By April 2025, 43% of U.S. shoppers reduced snack purchases, with 38% hunting promotions amid economic pressures. Salty snacks hit $41.9 billion but declined 0.3% in dollars over the past 52 weeks to April, though units rose 1%. GLP-1 drugs like Ozempic emerged as factors, projected to cut U.S. calorie intake 3-5% by 2030, slamming calorie-dense products. Office returns curbed mindless snacking. Lower-income Americans, squeezed by prior hikes, shifted to private-labels projected at $277 billion in 2025 sales. Frequent snackers remain at 48.8%, up since 2014, but prioritize value.
Giant Earnings Plunge Signals Affordability Pivot
Hershey forecasts an unprecedented EPS drop of 36-38% in early 2025, contrasting 15% profit gains during the 2009 crisis. Mondelez expects 10% decline. Both halt pricing after years of increases. PepsiCo CEO Ramon Laguarta announced the stop in 2023, now monitoring GLP-1 impacts. Mondelez CEO Dirk Van de Put blames volume drops on economics alone. Industry resets with better-for-you shifts like non-seed oils and portion control. Challengers like Utz report 5.8% branded salty growth in Q3 2025, grabbing share from giants.
Trump’s MAHA Momentum Reshapes Snack Landscape
Under President Trump’s Make America Healthy Again initiative, roughly 35% of the food industry pledged to eliminate artificial dyes, including Hershey and ice cream makers covering 90% of U.S. volume. FDA dye phase-outs gain traction, aligning with cleaner label demands. Political pressures like tariffs target additives, aiding consumer pushback against corporate gouging. Salty snacks adapt: chips mixed, crackers up 1% to $11 billion. Snacking endures as essential, but premium segments soften while discount channels hold. This validates conservative calls for accountability after years of unchecked price exploitation.
Private-Label Surge and Challenger Gains
Private-label growth erodes giant dominance, with $277 billion projected for 2025. Utz Brands posted 3.4% sales rise in Q3, Campbell’s Cape Cod up 2.6%, while Kellanova chips fell 1.1%. Jackson’s CEO James Marino pushes avocado oil snacks amid migrations from seed oils. Retailers amplify pressure through promotions. Experts like NielsenIQ note cutbacks, Euromonitor sees selective consumers slowing mature markets. Optimists spot value-premium duality, but structural shifts loom from health trends and economic resets.
Sources:
Investors Keep the Faith with Candy Giants Hershey, Mondelez
Snack Industry Faces 2025 Reset Amid GLP-1, Inflation
State of the Industry 2025: Chips Are Down and Up
State of the Industry 2025: Crackers Keep Evolving
Billion-Dollar Snack Companies Suddenly Care About Affordability
RFK Jr. Pushes Food Dyes Crackdown as Snacks Pivot to Affordability
Private Label Food Brands Grow
Utz Brands Reports Third Quarter 2025 Results